- 9 -
respect to any transfer of property that is not subject
to U.S. estate tax. [Emphasis added.]
Treasury Department Technical Explanation of the Protocol
Amending the Convention Between the United States of America and
Canada (June 13, 1995), 4 Roberts & Holland, Legislative History
of United States Tax Conventions 1366, 1403 (1996).8
Further, the Senate report from the Committee on Foreign
Relations states:
The proposed revised protocol obligates Canada and
the United States to treat a decedent’s bequest to a
religious, scientific, literary, educational, or
charitable organization resident in the other country
in the same manner as if the organization were a
resident of the first country. Thus, for U.S. estate
tax purposes, a deduction generally is allowed for a
bequest by a Canadian resident to a qualifying exempt
organization resident in Canada, provided the property
constituting the bequest is subject to U.S. estate tax.
[Emphasis added.]
S. Exec. Rept. 104-9, at 10 (1995).9 These explanations clarify
that, to take advantage of article XXIX B of the 1995 Protocol,
8 The technical explanation is the “official guide to the
Protocol. It explains policies behind particular provisions, as
well as understandings reached during the negotiations with
respect to the interpretation and application of the Protocol.”
Treasury Department Technical Explanation of the Protocol
Amending the Convention Between the United States of America and
Canada (June 13, 1995), 4 Roberts & Holland, Legislative History
of United States Tax Conventions 1366 (1996).
9 We note that the Joint Committee on Taxation explanation
of the 1995 Protocol provides further support that a deduction is
allowed for U.S. estate tax purposes provided the property
constituting the bequest is subject to U.S. estate tax. Joint
Comm. on Taxation, Explanation of Proposed Protocol to the Income
Tax Treaty Between the United States and Canada, at 9 (J. Comm.
Print 1995).
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